A.M. Best Special Report: Notching Model Uncovers Fruits Of Integration for Health-Care Systems.OLDWICK, N.J. -- Total capital and surplus increased 31% between 2004 and 2006 for a group of provider-owned health plans studied by A.M. Best Co. Each year since 2004, 61% of the plans in the study have experienced an increase in capital and surplus. * This special report presents an overview of results for interactively rated, provider-owned health plans under A.M. Best's Notching notching Radiology Small grooves on the anterior aspect of ribs seen on a plain CXR of children with post-ductal–ductus arteriosus coarctation of the aorta, due to 'tracks' from the pressure of collateral vessels on the ribs Model between 2004 and 2006, as well as A.M. Best's evaluative comments and the outlook. * The model benchmarks five rating factors for economic interdependence Economic interdependence is a consequence of specialization, or the division of labor, and is almost universal. It was described at least by 1828, when A. A. Cournot wrote, "but in reality the economic system is a whole of which the parts are connected and react on each other. and corporate commitment between such plans and their owners, with the goal of supplementing A.M. Best's group rating methodology and rating enhancement assessment for the plans' stand-alone financial strength and issuer credit ratings. * Enrollment in these plans and throughout the industry has declined since 2004, due in part to growth in self insurance. * The median profit margin of the study's provider owned health plans declined from 2.4% in 2004 to 1.3% in 2006, confirming that overall, expenses are outpacing revenues. * The median medical loss ratios for the health plans was 88.1% in 2006--higher than the industry median--and has increased slightly since 2004, with no more than a 2% change year over year. * The ICRs for the 16 health systems in this study are stable, and all are rated investment grade. * The average Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. score for provider-owned plans increased steadily from 85 in 2004 to 105 in 2006. * A.M. Best believes the divergence divergence In mathematics, a differential operator applied to a three-dimensional vector-valued function. The result is a function that describes a rate of change. The divergence of a vector v is given by between the most and least integrated health plans/health care systems could continue to widen wid·en tr. & intr.v. wid·ened, wid·en·ing, wid·ens To make or become wide or wider. wid  en·er n. during the medium term.
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